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Credit Risk Guarantee Fund Scheme for Low Income Housing (CRGFS)

The Ministry of Housing and Urban Poverty Alleviation, Government of India, has established a Credit Risk Guarantee Fund Trust for providing guarantees in respect of low-income Housing Loans. 

Under the Scheme, the Trust will provide credit risk guarantee to the lending institutions against their housing loans up to Rs 5.00 lakh granted to the borrowers in the Economically Weaker Section (EWS)/ Lower Income Group(LIG) categories in urban area without requiring any collateral security and/or third party guarantee.

The extent of Guarantee Cover to be provided under the Scheme is 90% of the amount in default in respect of loan amount up to Rs 2.00 lakh and 85% of the amount in default for housing loan above Rs 2.00 lakh and up to Rs 5.00 lakh.

Salient features of the scheme are as under:

  1. Eligibility

    New individual borrowers in EWS/LIG category of the population who are seeking individual housing loan not exceeding a sum of Rs 5.00 Lakh or such amount as may be decided by the Trust from time to time and a housing unit size upto 430 sqft (40 sqm) carpet area and to which housing loan has been provided without any collateral security and/or third party guarantee. Eligible borrowers, as defined above, forming a group or housing society of at least 20 members, shall also be eligible under the scheme.

    The eligible borrower shall be required to submit an undertaking to the lending institution to the effect that she/he has not availed any other housing loan covered under this scheme nor any additional risk cover has been granted to the housing loan availed by her/him by Government or by any general insurer or any institution or any other person or association of persons carrying on the business of insurance, guarantee or indemnity.

  2. Eligible Activity

    Activities that are eligible for Guarantee Cover are home improvement, construction, acquisition and purchase of new or second hand dwelling units involving a  Housing Loan amount not exceeding `5 lakh per person. Loans given fully/partly for renovation/repairs are not eligible for the Guarantee Cover under the Scheme

  3. Housing Loans not eligible under the scheme

    1. The following Housing Loans shall not be eligible for being guaranteed under the scheme:

    2. Any housing loan in respect of which risks are additionally covered by Government or by any general insurer or any institution or any other person or association of persons carrying on the business of insurance, guarantee or indemnity to the extent they are so covered.

    3. Any housing loan granted to any borrower, who has availed himself of any other housing loan covered under the scheme or under the schemes mentioned in clause (I) above and where the lending institutions has invoked the guarantee provided by the Trust or under the schemes mentioned in clause (I)� but has not repaid any portion of the amount due to the Trust or under the schemes mentioned in clause (I) as the case may be, by reason of any default on the part of the borrower in respect of that housing loan.
    4. Any housing loan which has been sanctioned by the lending institution against collateral security and/or third party guarantee.

    5. Any housing loan which has been sanctioned by the lending institution with interest rate more than the prevailing rate applicable for that eligible loan category or 2% over the base-Rate of the lending institution whichever is easier.

  4. Economically Weaker Section (EWS)

    Economically Weaker Section (EWS) means households with household income upto `1,00,000/- per annum or as revised by the Ministry of Housing & Urban Poverty Allevation, Government of India, from time to time.

  5. Low Income Group (LIG) category

    Lower Income Group (LIG) means households with household income between `1,00,001/- to `2,00,000/- per annum or as fixed by the Ministry of Housing & Urban Poverty Allevation, Government of India, from time to time.

  6. Low Income Housing

    A Housing unit, for economically weaker and low income individuals of size upto 430 Sqft (40 Sqm) carpet area.

  7. Tenure of guarantee cover

    Guarantee cover shall commence from guarantee start date and shall run through the agreed tenure of the Housing Loan and for a maximum period of 25 years or loan termination date, whichever is earlier.

For more details, kindly visit a Bank of Baroda Branch nearest to you.



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